Double-digit revenue growth sent Deere’s quotes up 5%
Shares of agricultural and construction equipment manufacturer Deere & Co. (DE) rose 5.3% to $367.86 at auction on November 25. The reason was a strong report for the fourth quarter and the entire 2021 fiscal year.
For the fiscal year ended October 2021, Deere’s revenue grew by 24% year-on-year to $44 billion; net income exceeded $5.9 billion, or almost $19 per share, which is more than twice as high as a year earlier.
The main positive news was the announcement of the resolution of the conflict with the American trade union UAW – an agreement, and qualified employees returned to work. Unfortunately, however, the strike hurt the results of the fourth quarter and the entire fiscal year.
Deere management expects continued growth in demand for agricultural machinery against the background of an increase in prices for farm products. In addition, Deere has a segment of construction equipment, which will benefit from the US $1.75 trillion investment program in infrastructure.
The pressure on Deere’s supply chain persists, but the company intends to carry out uninterrupted deliveries in the main categories of goods. According to the results of the fiscal year 2022, Deere expects a profit in the range of $6.5-$7 billion. Deere shares remain one of the areas for long-term investments.
The company is among the world’s leading manufacturers of heavy machinery, and it is a leader in the segment of agricultural power-armed machines. Sales of products for precision farming continued to grow in the fourth quarter, and this trend will continue as farms look for ways to increase profitability. In addition, the average age of farmers is also increasing, which increases the demand for labor automation tools.
